Resources swamp innovation

Australia’s reliance on the resources boom to drive the economy has made it neglect technological innovation that can create wealth too, according to the authors of a research project which highlights how difficult it is to commercialise new technology.

David Anstice, a former executive vice-president at multinational pharmaceutical company Merck and driver of the University of Sydney Business School study, said the resources boom had swamped innovation in Australia.

“It’s a danger that something that provides as much support for the economy as resources do will make us lazy about looking for other ways to create value," Mr Anstice said.

“Resources can mask the problem, make us feel more comfortable.

“The day will come when the customer doesn’t want that stuff and we’d better have something else in its place."

The study followed 25 firms in the drug development, medical devices, renewable energy and information and communication technologies industries from start-up to commercialisation.

Lead researcher Catherine Welch said a common frustration expressed by entrepreneurs was the lack of consistency in government policy.

“Innovation is not just a single discovery, it’s usually a chain of discoveries that happen over time," she said.

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The fruits of innovation seen today were thanks to encouraging reforms 30 years ago, she said.

“One of the names that kept coming up is the former industry minister, John Button. He is still seen as the gold standard. He made a number of tremendous contributions, what we’ve seen now is a result of decisions that he made," she said.

It is unlikely that one of Australia’s biggest start-up success stories, hearing device maker
Cochlear
, could be repeated today, according to Mr Anstice.

“We can get other Cochlears but it will depend on having researchers that are encouraged and supported . . . we can produce more Cochlears but not in the same way," Mr Anstice said.

At a speech on Tuesday night at the JJC Bradfield Institute, Cochlear chief executive Chris Roberts said Australian governments had “lost the plot" and were inhibiting innovation through over-regulation.

“The social and economic benefits delivered by innovative companies do not come easily and should not be taken for granted.

“It is very easy for government to load cost and compliance burdens onto business with ever-increasing regulation," he said.

“As a nation we will pay a real cost for doing so, if we discourage the growth of new companies and thereby miss out on having many more Cochlears."